Marcos Pushes for Higher Tax-Exempt Income, Wealth Tax by End of 2026

MANILA, Philippines – President Ferdinand Marcos Jr. is pushing for Congress to pass a tax reform measure that would expand the income tax exemption ceiling for individuals earning P350,000 and below annually, while also introducing a wealth tax on luxury vehicles. The administration aims for the bill's approval before the end of 2026. At a Palace press briefing, Palace Press Officer Undersecretary Claire Castro said the Department of Finance (DOF) continues to refine the Promoting Growth, Revenue, and Equity towards Socio-Economic Sustainability (ProGRESS) package. The DOF estimates generating P518.71 billion in fresh revenues from its tax reforms from 2027 to 2030, while granting P326.92 billion in tax relief, resulting in a net gain of P191.77 billion. "The DOF is still studying and working on it. The President is aware that the department is carefully reviewing the proposal because he wants it passed as soon as possible," Castro said. Asked whether the administration is targeting passage next year, Castro said Marcos wants the measure approved before the end of 2026. ProGRESS forms part of the government’s tax reform package, which the DOF said would help finance priority programs announced by Marcos during his fifth State of the Nation Address. ‘Won’t burden ordinary Filipinos’ Responding to concerns that the proposed tax measures could add to the financial burden of consumers, Castro said the reforms are designed to have a limited impact on ordinary Filipinos. “Some of the proposed taxes being discussed will not affect ordinary Filipinos. They will primarily affect those who buy luxury vehicles," Castro said. Asked about the proposed taxes on sugary drinks, single-use plastics, and vape products, Castro said some of the measures are also intended to promote better public health. "These are related to public health. It would be better if people avoid frequently consuming very sweet food and drinks," Castro said in Filipino. The DOF has said the proposed tax reform package is expected to generate additional revenues to help fund priority government programs while providing fiscal space for planned tax relief measures and other social services. In his fifth State of the Nation Address (SONA 2026), Marcos called on lawmakers to expand the exemption ceiling for personal income tax to those earning P350,000 yearly from the current P250,000. The President also proposed to exempt micro and small businesses from paying the minimum corporate income tax (MCIT), equivalent to 2% of gross income of a corporation for a period of 12 months. Under the ProGRESS bill, the personal income tax-exempt ceiling adjustment would result in the following: Meanwhile, with the proposed minimum corporate income tax exemption, micro (with less than P3 million gross sales) and small (with gross sales between P3 million and P20 million enterprises will no longer be required to pay the MCIT, resulting in a total of P26.60 billion in revenue impact over the next four years. To offset the foregone revenue from the tax cuts, the DOF proposes the following tax measures: –NB, GMA News